Siemens 2010 Annual Report Download - page 223

147 Consolidated Financial Statements
148 Consolidated Statements of Income
149 Consolidated Statements of Comprehensive Income
150 Consolidated Statements of Financial Position
151 Consolidated Statements of Cash Flow
152 Consolidated Statements of Changes in Equity
154 Notes to Consolidated Financial Statements
(in millions of €, except where otherwise stated
and per share amounts)
261 Additional information
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but is tested for impairment as part of the overall investment
in the associated company. Siemens’ share of its associated
companies’ post-acquisition profits or losses is recognized in
the income statement, and its share of post-acquisition move-
ments in equity that have not been recognized in the associ-
ates’ profit or loss is recognized directly in equity. The cumula-
tive post-acquisition movements are adjusted against the car-
rying amount of the investment in the associated company.
When Siemens’ share of losses in an associated company
equals or exceeds its interest in the associate, Siemens does
not recognize further losses, unless it incurs obligations or
makes payments on behalf of the associate. The interest in an
associate is the carrying amount of the investment in the as-
sociate together with any long-term interests that, in sub-
stance, form part of Siemens’ net investment in the associate.
Intercompany results arising from transactions between
Siemens and its associated companies are eliminated to the
extent of Siemens’ interest in the associated company. Siemens
determines at each reporting date whether there is any objec-
tive evidence that the investment in the associate is impaired.
If this is the case, Siemens calculates the amount of impair-
ment as the difference between the recoverable amount of the
associate and its carrying value. Upon loss of significant influ-
ence over the associate, Siemens measures and recognises any
retaining investment at its fair value. Any difference between
the carrying amount of the associate upon loss of significant
influence and the fair value of the retaining investment and
proceeds from disposal is recognised in profit or loss.
Foreign currency translation – The assets, including good-
will, and liabilities of foreign subsidiaries, where the func-
tional currency is other than the euro, are translated using the
exchange rate at the end of the reporting period, while the
statements of income are translated using average exchange
rates during the period. Differences arising from such transla-
tions are recognized within equity and reclassified to net in-
come when the gain or loss on disposal of the foreign subsid-
iary is recognized.
The exchange rates of the significant currencies of non-euro
countries used in the preparation of the Consolidated Financial
Statements were as follows:
Year-end exchange
rate € quoted into
currencies
specified below
Annual average rate
€ quoted into
currencies specified
below
September , Fiscal year
Currency ISO Code    
U.S. Dollar USD 1.365 1.464 1.358 1.361
British Pound GBP 0.860 0.909 0.869 0.875
Chinese
Renminbi CNY 9.133 9.966 9.226 9.340
Indian Rupee INR 61.247 70.001 62.754 66.335
Hyperinflationary accounting – Financial statements of for-
eign subsidiaries, where the functional currency is the cur-
rency of a hyperinflationary economy, are adjusted to reflect
changes in general purchasing power. In such instances, all
items which are recognized on the Statement of Financial Posi-
tion and in the Statements of Income are translated using the
exchange rate at closing. Each non-monetary item on the
Statement of Financial Position which is carried at cost or am-
ortized cost and each transaction in the statements of income
are restated by applying a general price index from the date of
acquisition or initial incurrence of these items. The cumulative
effects of inflation are recognized in the retained earnings at
first time adoption or as gains and losses in net income at
subsequent periods.
Revenue recognition – Revenue is recognized for product
sales when persuasive evidence of an arrangement exists,
delivery has occurred or services have been rendered, the risks
and rewards of ownership have been transferred to the cus-
tomer, the amount of revenue can be measured reliably, and
collection of the related receivable is reasonably assured. If
product sales are subject to customer acceptance, revenue is
not recognized until customer acceptance occurs. Revenues
from construction-type projects are generally recognized un-
der the percentage-of-completion method, based on the per-
centage of costs to date compared to the total estimated con-
tract costs, contractual milestones or performance. Revenues
from service transactions are recognized as services are per-
formed. For long-term service contracts, revenues are recog-